Closing Recap

Thursday, December 18, 2025

U.S. stock futures got a pop overnight following stronger results/guidance from semiconductor/memory chipmaker Micron (MU), giving a much needed boost the Nasdaq/Tech Sector (XLK) throughout the day. Stock markets extended gains on the heels of a “cooler” CPI inflation report this morning, boosting risk assets/interest rate sensitive names as the “risk” trade was back after a 4-day losing streak for the S&P 500 (SPX) prior. The Consumer Price Index (CPI) rose 2.7% y/y in November, less than the 3.1% increase that had been expected by economists. On a “core” basis, which strips out the more volatile costs of food and energy, prices rose 2.6% y/y in November and also below estimates of over 3%. Technology (XLK0, Consumer Discretionary (XLY) and utilities (XLU) were the biggest winners while Energy (XLE), REITs (XLRE) and Consumer Staples (XLP) were the biggest sector decliners. Outside of the better CPI reading, Philly Fed Manufacturing headline data was weak for December, but the internals were pretty solid with employment hitting its highest since May, while prices paid declined notably, while weekly jobless claims were down from last week, and in-line with consensus. After the morning spike, major averages chopped the rest of the day, holding in positive territory into tonight’s Bank of Japan policy meeting where expectations are strongly for a 25 basis point rate hike, raising the short-term policy rate from 0.5% to 0.75%. This would be the highest level in about 30 years, followed by press conference from Governor Ueda.

In Central banks: The Bank of England cut interest rates by 25 basis points to 3.75% in a tight vote, with five members favoring the reduction and four members preferring to keep rates on hold. Some analysts expected six or more members to vote in favor of a rate cut after Wednesday’s below-forecast U.K. inflation data. Later the European Central Bank (ECB) decided to keep the three key ECB interest rates unchanged (as expected) while staff projections show headline inflation averaging 2.1% in 2025, 1.9% in 2026, 1.8% in 2027 and 2.0% in 2028.

In Sentiment weekly data: 1) The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was +10.9% vs +14% last week. Bulls fall to 44.1% from 44.6% (holding above 44% for a 3^rd straight week – first time in over a year), while Neutrals drop to 22.7% from 24.8%, and Bears rise to 33.2% from 30.6%. 2) This week’s NAAIM Exposure Index rose to 100.70 from last week’s 97.13 – highest since 10/29 Reading of 100.83 which was the highest since 7-3-24 – 2025 trough from 4-16 of 35.16 – Last Quarter Average (Q3) of 86.63.

• For CPI, the food category with the biggest jump in prices compared to a year ago was beef. Uncooked ground beef (+14.9%), uncooked beef roasts (+21.2%), and uncooked beef steaks (14.7%) all showed elevated prices. The overall meats category was up 8.9%.
• Weekly Jobless Claims fell to 224,000 from 237,000 prior and vs. consensus 225,000; the 4-week moving average climbed to 217,500 from 217,000 prior; continued claims climbed to 1.897M (vs. consensus 1.930M) from 1.830M prior week and the US insured unemployment Rate unchanged at 1.2% Dec 6 week from 1.2% prior week (prev 1.2%).
• Philadelphia Fed business conditions December fell to -10.2 from November -1.7 and well below consensus for a positive reading of 3; prices paid index for December fell to 43.6 vs November 56.1; new orders index December 5.0 vs November -8.6; employment index December 12.9 vs November 6.0; six-month business conditions December 41.6 vs November 49.6 and six-month capital expenditures outlook December 30.3 vs November 26.7.

• WTI crude oil prices edged higher $0.21 or 0.38% to settle at $56.15 per barrel. Brent Crude futures settle at $59.82/bbl, up 14 cents, or 0.23%.
• Bitcoin prices all over the place again today, massive volatility seeing highs above (0K yesterday, before falling and then today hitting highs of $89,350 before an afternoon plunge took it to lows of $84,450.
• Raw sugar ​​settled down 0.28 cent, or 1.9%, at 14.48 cents per lb., having hit a more than one-month low of 14.38. The contract is reversing some of the gains seen since it hit a 5-year low in November.
• U.S. Treasury yields fell on Thursday after data showed that consumer prices rose by less than economists had forecast on an annual basis last month. The 2-year note yield was last down 2.3 basis points on the day at 3.462% and reached 3.433%, the lowest since October 17. The yield on benchmark U.S. 10-year notes fell 3.1 basis points to 4.12%.
• The US dollar was flat vs. the yen ahead of the Bank of Japan meeting where they are expected to continue their gradual tightening cycle on Friday with a quarter percentage point rate increase, bringing its policy rate to a three-decade-high of 0.75%. Interest‑rate futures imply around 40 basis points of additional hikes next year. Governor Kazuo Ueda’s guidance on Friday will be closely scrutinized for clues about the BOJ’s appetite for additional tightening.

• In Apparel & Accessories: LULU shares jumped on WSJ report that activist investor Elliott Investment Management has built a stake of more than $1 billion in the athletic apparel retailer and lining up a potential CEO candidate https://tinyurl.com/3dx39dpz ; separately, the company said it will enter 6 new markets in 2026 via franchise partners, its biggest one-year international push
• In Restaurants: DRI reported mixed Q2 results as EPS of $2.08 missed the $2.10 estimate but sales rose 7.3% to $3.1B topping the $3.07B consensus and comps 4.3% beat the 3% estimate; raised its annual total sales growth in the range of 8.5% to 9.3%, compared to previous projection of 7.5% to 8.5% rise; LongHorn Steakhouse led the way with 5.9% same-restaurant sales growth, followed by Olive Garden with 4.7%. In research, SHAK was upgraded to Neutral from Underweight at JP Morgan citing valuation following recent pullback.
• In Beauty Sector: Douglas AG (DOUDF) cut its sales guidance for 2026 and beyond as expects sales of EU4.65B-EU4.8B ($5.46B-$5.64B) in 2026, up from the EU4.58B it reported for the financial year through September, but below the 5-billion-euro target it had set in 2023; said sales growth driven by Central and Eastern Europe, core markets sluggish.

• In Ride Sharing/Food Delivery: CART shares declined after Reuters reported the U.S. Federal Trade Commission is probing CART’s AI pricing tool Eversight, two sources familiar with the matter told Reuters on Wednesday. A study involving 437 shoppers viewing Instacart prices in four cities saw wildly different prices for the same items sourced at the same stores. https://tinyurl.com/66wr9dhd
• In Autos: auto retailer KMX reported a drop in Q3 revenue and profit, hurt by weaker demand and falling prices of used vehicles in the U.S., but topped expectations. KMX posted Q3 EPS of $0.43, down from $0.81 y/y and revs fell to $5.79B, down from $6.22B a year ago; said on track to cut at least $150M in selling, general and administrative costs by FY27.

• In Solar: ENPH was upgraded from Sell to Neutral at Goldman Sachs with $29 PT noting since being added to their Sell list on July 8, 2025, the shares declined by (23%) vs the Russell 2000 up 12%. The firm believes mgmt has reset expectations lower amid anticipation of a revenue trough in Q126 with several growth drivers. Goldman also said they highlight Buy-rated FSLR and NXT as well positioned to maintain solid growth on the back of strong domestic market share, while in SMID caps it sees upside potential in ARRY and FLNC on the back of improved execution.
• In Power sector: GEV was upgraded from Hold to Buy at Jefferies and raised tgt to $815 from $736, saying they are more positive on the outlook for Power (gas pricing & services visibility) and electrification, yet shares are down since the December 9th Analyst Day. Gas Turbine pricing continues to positively surprise and services provides visibility deeper into the 2030s, eventually offsetting gas Equipment weakness.
• Datacenter sector: Goldman Sachs said the assume Data Center with a continued Buy-rating on DLR, a downgrade of EQIX to Neutral, and fresh coverage of IREN at Neutral. The datacenter growth runway remains long, driven by elevated AI infrastructure spending and continued cloud migration. Best positioned: DLR – strong backlog, re-leasing upside, and development pipeline. We downgrade EQIX as profit growth should be slower given a greater mix of revenue from retail colocation and its investments in AI positioning may be a near-term drag.
• In Pipelines & MLPs: ET was downgraded to Equal Weight saying it remains improperly valued, but without a specific event path to narrow ET’s discount, outperformance to the group will likely prove difficult; they also cut EPD to Underweight saying while the co remains a high quality company, the case for performance commensurate with the group is becoming harder to make, in MSCO’s view.
• In Oil & Gas E&P/Majors: SOC shares jumped after saying the US Department of Transportation’s Pipeline and Hazardous Materials Safety Administration determined the pipeline connecting the Santa Ynez Unit to Pentland Station terminal in California constitutes an interstate pipeline. BP tapped Woodside Energy’s Meg O’Neill as its next CEO, its first external hire for the post in over a century and the first woman to lead a top five oil major.
•  In Oil Services: Piper said they stay selective, but are encouraged by cyclical tailwinds beginning to mount, including Saudi Arabia/Mexico returning to work and a bottoming US Land market, while Offshore eyes a 2027 recovery. The firm upgraded HP to Overweight and double upgraded NBR to Overweight from Underweight who are both well positioned to capture the Int’l inflection, particularly in Saudi Arabia. Piper also upgraded RNGR to Overweight from N given its favorable growth outlook, double downgraded XPRO to Underperform and said they have highest conviction on FTI, SEI, NES, INVX and says FLOC best reversion story.

• In Asset managers: BEN raised its quarterly dividend to $0.33 from $0.32 and said its Board has authorized to repurchase, from time to time, up to an additional 20.8 million shares of its common stock in either open market or private transactions, for a total of up to 40.0 million shares available for repurchase.
• In Banks: CVBF and HTBK entered into a definitive merger agreement where Heritage will merge with and into Citizens in an all-stock transaction valued at approximately $811 million, or $13.00 per HTBK share, based on CVBF’s closing stock price on December 16, 2025. GBCI was upgraded to Overweight from Neutral at based on its greater NIM visibility via asset repricing, double-digit EPS growth outlook, more benign credit profile, discounted relative valuation.

• In Crypto: CORZ was to Market Outperform at Citizens with $30 tgt as believes its power pipeline provides a solid foundation to secure additional HPC lease agreements with new customers beyond CRWV, enabling the company to capture the accelerating demand for HPC infrastructure amid the persistent power constraints in the industry.
• In Financial Services: FDS reported Q1 EPS and revs that topped consensus and laid out its growth plans for the year, including greater shareholder returns as the board increased the limit for its repurchase program by $400 million to bring it up to $1 billion; also sees FY26 adjusted EPS $16.90-$17.60, vs. consensus $17.34.

• In Insurance: ALL, PGR, KMPR were all downgraded in its near-term view of the Auto Insurance sector, ALL (Outperform to Market Perform), PGR (Outperform to Market Perform), and KMPR (Market Perform to Underperform). The firm said recent conversations with market participants, along with confirming data, suggest that Auto fundamentals have begun to materially deteriorate in the last few months. This will likely translate into rising loss ratios and lower earnings.

• CYTK was upgraded from Neutral to Buy at Goldman Sachs with $95 tgt saying learnings from Odyssey increase the odds of Acacia succeeding; a series of label expansions could put aficamten in a privileged competitive position.
• INSM shares declined after saying its Phase 2b BiRCh study of brensocatib in patients with chronic rhinosinusitis without nasal polyps failed to meet primary or secondary efficacy goals, prompting immediate discontinuation of the CRSsNP program.
• LLY said that its investigational obesity pill largely helped patients maintain their weight loss after they switched from injectable treatments Wegovy and Zepbound, results that could widen the appeal for the pill.
• PYXS shares slide after announced preliminary data from its ongoing Phase 1 clinical studies evaluating micvotabart pelidotin, a first-in-concept antibody-drug conjugate targeting extradomain-B of fibronectin, in patients with recurrent/metastatic head and neck squamous cell carcinoma.
• SGMT announces results from the phase 1 PK clinical trial of denifanstat and resmetirom combination; combination well-tolerated with no serious adverse events; plans phase 2 trial for MASH with F4 fibrosis starting in 2H’26.
• TAK said its oral drug zasocitinib induced "clear or almost clear skin" in more than half of patients with moderate to severe plaque psoriasis. Approximately 30% of patients achieved "completely clear skin." The drug achieved all the efficacy goals of two randomized, controlled Phase 3 clinical trials.
• In Cannabis/CBD (MSOS, TCNNF, CRLBF, CURLF, GTBIF): President Trump signed an Executive Order that will "improve medical marijuana and cannabidiol research to better inform patients and doctors," the White House stated in a fact sheet. "The Order directs the Attorney General to expedite completion of the process of rescheduling marijuana to Schedule III of the Controlled Substance Act (from Schedule 1). The Order directs the White House Deputy Chief of Staff for Legislative, Political, and Public Affairs to work with the Congress to allow Americans to benefit from access to appropriate full-spectrum CBD products while still restricting the sale of products that pose serious health risks. The Order directs HHS to develop research methods and models utilizing real-world evidence to improve access to hemp-derived cannabinoid products in accordance with Federal law and to inform standards of care.

• HUM was awarded $7.34B to exercise Option Period Two under a contract for health care and administrative support services in support of the Defense Health Agency TRICARE program in the East Region.
• ITGR shares advanced after The WSJ reported that activist investor Irenic Capital Management has built a stake of more than 3% and is urging the medical-device outsourcing company to refresh its board and consider a sale. Irenic delivered a letter privately to Integer’s board earlier this week detailing its requests per the article.
• PEN was upgraded to Overweight at JP Morgan as a confluence of anniversaried headwinds and major catalysts/tailwinds have US bullish heading into 2026. The firm overhauled its model with each sub-segment broken out in US Thrombectomy and US Embolization and Other and now see a strong likelihood of positive estimate revisions

• PSN said it was awarded a seat on the U.S. Air Force Comprehensive Construction & Engineering Multiple Award Task Order Contract, or MATOC. Managed by the Air Force Civil Engineering Center, this has a $15B ceiling value contract.
• SPIR said it was selected as an awardee on the Missile Defense Agency’s SHIELD IDIQ contract, which has a ceiling value of up to $151B across the program. Spire says it will compete for task orders tied to satellite-based RF intelligence and analytics for defense missions.
• The U.S. approved $11.1B in arms sales to Taiwan, including 82 HIMARS launchers and 60 howitzers, plus missiles and anti-tank drones, per the Pentagon’s DSCA.
• Two U.S senators on Thursday asked several U.S. construction companies to detail the use of Chinese-made DJI drones in government contracts and at sensitive National Security facilities, saying the issue raised National Security concerns. DJI sells more than half of U.S. commercial drones. In September, a U.S. judge rejected a bid by DJI, to be removed from the U.S. Defense Department’s list of companies allegedly working with Beijing’s military.

• In Chemicals: SHW was upgraded to Buy from Neutral at Citigroup with $390 tgt as sees a favorable setup for the shares into 2026 as interest rate cuts should bring a better housing environment in 2027 and Sherwin-Williams shares typically perform well in the year following the beginning of rate cuts. Citi also raise its tgts on ALB to $150 from $100 while adds an "upside 90-day catalyst watch" and also adds DOW to a "downside 90-day catalyst watch" on shares as sees Q1 guidance risk due to compressed polyethylene margins from higher ethane costs and soft demand.

• In AI/Data Center: ORCL & OpenAI received Michigan approval to power a 1.4 GW Stargate data center with DTE Energy fast-tracking electricity for a facility the size of a nuclear reactor. The project pushes their U.S. partnership beyond 8 GW of planned capacity & $450B+ in investment with Oracle fully covering power costs. Also, OpenAI has held preliminary discussions with some investors about raising at a valuation of around $750B, according to The Information, citing three people with knowledge of the discussions. It could raise tens of billions of dollars, and as much as $100B, according to two of the people. Talks are early and nothing has been finalized.

• SNDK, WDC, STX in memory, NAND, HDD among the biggest beneficiaries following the MU results/guidance.
• ON said it’s partnering with GFS to develop and manufacture GaN power devices on GF’s 200mm eMode GaN-on-silicon process, starting with 650V parts. Expects customer sampling in the first half of 2026.